I agree.
In KotR, if I remember correctly, with the exception of the Prinz, who inherited all royal lands when he became King, a character had to be knighted before he could be assigned land by a Duke. So passing on land to your next avatar was nigh impossible. I remember that Stig's plan, as Duke of Franconia, to make his daughter his heir so his next avatar could presumably marry her and inherit the Duchy, raised some eyebrows.
In LotR, I admit to taking part in land fraud by passing on Constantinople from Aleksios to Tiv, my next avatar, rather than to Ioannis, as one would expect. Which in hindsight was a bit sleazy of me, though at that point Al was terrified of civil war occurring after his death.
Personally, I think not keeping territories in the exact same hands from generation to generation encourages cooperation amongst House members. You scratch someone's back now, and they'll take care of your next avatar later. It promotes House cohesion rather than individual accumulation.
Perhaps, as mentioned earlier, there should be a few turns gap between the death of a player's old character and the spawning, or assumption, of his new one. Thus ensuring that everyone starts out with no inherited land. This, also discussed earlier, would encourage players to maximise and preserve their current character since death would become more of an impediment.
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